Decentralized exchange Uniswap has released a research report on the advantages of Uniswap trading on Layer 2 networks. The research shows that 97.5% of trades under $125,000 perform better on Layer 2 networks than on Ethereum. The concentration of liquidity on Layer 2 networks is also 75% higher than on Ethereum, thus improving the capital efficiency of liquidity providers. Due to lower transaction costs, liquidity providers can rebalance their Uniswap positions more frequently. On average, liquidity providers operating across the full price range on Layer 2 enjoy arbitrage profits about 20% higher than on the mainnet. These research data were obtained before the Dencun hard fork, suggesting that efficiency will be even higher with the introduction of blob transactions.
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